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Allied Stone Inc. v. Acadia Insurance Co.

United States District Court, N.D. Texas, Dallas Division

March 27, 2018

ALLIED STONE, INC., Plaintiff,



         This is an insurance dispute that has been removed from a Texas state court. Allied Stone, Inc. (Allied Stone) sued its insurer, Acadia Insurance Company (Acadia), the company that allegedly handled the adjustment of the claim at issue, Union Standard Insurance Group, LLC, and the individual adjuster, James Amato. Allied Stone is a resident of Texas. But although Acadia is not a resident of Texas, Union Standard and Amato are. The defendants removed the case to federal court on the grounds that Allied Stone fraudulently joined Union Standard and Amato to defeat diversity jurisdiction. Before the Court is Allied Stone's Motion to Remand. Doc. 8. For the reasons that follow, Allied Stone's motion is GRANTED.



         A. Factual Background[1]

         Allied Stone owns a structure in Durant, Oklahoma. Doc. 1-5, Pl. Pet., ¶ 4.1. In exchange for premiums, Acadia insured the structure. Id. The policy provided coverage for damage resulting from hail and wind. Id. In April 2016, hail and wind damaged Allied Stone's insured structure, which prompted Allied Stone to file an insurance claim with Acadia. Id. ¶ 4.2. In the claim, Allied Stone asked Acadia to cover the cost of repairing the damage from the wind and hail. Id.

         Acadia assigned the adjustment of Allied Stone's claim to Union Standard, which appointed its employee, Amato, as the adjuster. Id. ¶ 4.3. According to Allied Stone, Amato and Union Standard acting through Amato unlawfully mishandled Allied Stone's claim. Doc. 1-5, Pl. Pet., ¶¶ 4.3-4.8. Allied Stone alleges in relevant part that “Mr. Amato did not prepare any estimates or scopes of damages to the Property or failed to provide those to the insured. Because of Mr. Amato's failure to estimate or scope damages, Plaintiff was forced to prepare its own estimate of damages and point them out to Amato”; “Mr. Amato refused to retain appropriate consultants to evaluate the claim. Specifically, Mr. Amato retained consultants from a preferred vendor and was unnecessarily hostile to the insured in claim communications and investigation methods”; “Mr. Amato was the only point of contact on Acadia's behalf yet he continually delayed the claims process and refused to provide answers to the insured and its representative”; and “Mr. Amato represented to the Plaintiff that certain damages were not covered under the Policy when in fact they were.” Id. Allied Stone ultimately alleges that Mr. Amato's wrongful conduct caused Acadia to wrongfully underpay its claims. Id. ¶ 4.8.

         B. Procedural Background

         On May, 11, 2017, Allied Stone filed its Original Petition in the 193rd Judicial District Court of Dallas County, Texas. Id. ¶ 1. Even though Union Standard and Amato are citizens of Texas, the defendants the removed the action to this Court on diversity grounds, claiming that Allied Stone fraudulently joined Union Standard and Allied Stone to defeat federal diversity jurisdiction. Doc.1, Notice of Removal. Allied Stone then moved to remand the case to the Texas court, denying that it fraudulently joined Union Standard and Allied Stone. Doc. 8, Mot. to Remand. Because Acadia responded, Doc. 12, Resp., and the deadline for Allied Stone to reply has elapsed, Allied Stone's motion to remand is ripe for review.



         Federal courts have limited jurisdiction. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). They can hear cases only as authorized by the Constitution and statute. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). District courts “must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum.” Howery, 243 F.3d at 916.

         A. Removal Jurisdiction

         The federal removal statute allows a defendant to remove any civil action to federal district court so long as that action falls within the district court's original jurisdiction. 28 U.S.C. § 1441(a). The defendants removed this case because they think this Court has diversity jurisdiction under 28 U.S.C. § 1332. A district court has diversity jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of $75, 000 . . . and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). For a case to be between citizens of different states, no plaintiff can be from the same state as any properly joined defendant. Mas v. Perry, 489 F.2d 1396, 1398-99 (5th Cir. 1974). And for a case to be removed to federal court, ...

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